Transcripts
1. Introduction: So you're thinking about freelancing like like that guy. Well, get ready for one hell of a ride because it's going to be a bumpy, bumpy road. Don't listen to that full. He just got started and probably had no clue what awaits him, true, there are a few challenges such as doing a Texas tough clients and nagging doubts in your own abilities and your skills. However, if you know a few essentials, it will only be half bad. And in fact, freelancing can be very, very rewarding and well, freeing, I guess. Now you might ask yourself, what are those essentials? Good question. Well, in my opinion, the most important things you need to master as a freelancer are the following five. Number one, get out of your cave. It's easier to say than it is to do, but it's a necessity for everyone who works from home. Number two, you must learn to do a good job and trust yourself with it. It is really important that you develop some trust in your own skills. And number three, often overlook, you must learn the accounting 101 without a mere minimum of knowledge, your Zola business will most definitely fail. Number four, you need to learn how to educate yourself. But given that you're watching this very video at this very moment, you probably already got that point covered. Number five, last essential on this list. And it's also very often overlooked. It is what you do with the money that you earn. How will you build up savings? We will cover those five points in this class. At the end, you will have a better understanding of which pot boards there are and how to navigate around them with style. And now it's time to get started.
2. Workspace 101: My desk, what a wonderful place. Not finding a flat and Berlin isn't absolute pain, a nightmare. So that means working from home translate to working from my bedroom. And let's be honest, year it probably does for you to not everybody has the luxury of having a dedicated office room in their flat. So you will end up working next to your bed, like I do next to your fridge in the kitchen, or working in the living room? It is, in my opinion, super important to have a dedicated working space that you can leave. That is two reasons. Number one, you will be more organized, you know where your things are and you can have a big monitor, a proper keyboard, and a mouse that allows you to work faster than you can ever do on a laptop. Number two, you can leave your work by getting up the chair or out of the room, being able to leave your work behind and not follow you everywhere you move. It is freeing when you're constantly reminded of work, of clients of task and need to do, you won't relax and you start loading freelancing. Working from home is hot psychologically, you don't have a barrier from work. Basically, you wake up and you are in the office. And furthermore, you don't get out of it. Not getting out, not leaving your cave is one of the biggest dangers of home office. Deficit is crucial that you leave your cave at least once a day. Fresh air and Sun will blow your mind quite literally. You will have much better ideas and work more efficiently. After all, it's too easy to get lost in work and freelancing because without dedication, especially in the beginning, you will not manage to start and you will always feel the need to do more and more. However, once you've started get out of your cave and joy, the Freeland, freedom that comes with freelancing. Maybe try fishing. Two spots, even though running sex. Do it. Even cruise around the city on your bike or motorcycle will help you clear your head and get inspired for your work. And as soon as you earn enough money, join a co-working space. This will allow you to get out of your house, meet a bunch of people on a daily basis and separate your work life from your private life. Trust me now and thank me later. The sooner you understand the importance of leaving your workspace, the more content you will be with your job, and the better the work you will do.
3. Client Management 101: Do a good job. Done stupid advice, right? Well, unfortunately I see more and more free lenses nowadays that under-perform by a lot. Either they overestimate their own skills, or they are plain lazy, or they're very, very poor at communicating. Not cool. Potentially, you can get away with doing a mediocre job, but really you shouldn't. Freelancers are, in my opinion, experts in their fields. People who can ask for high hourly wages because they are heavily skilled and they provide a huge benefit to the client. In general, they are not coming directly from university with little to no practical experience. They are rather veterans. Bitter. I certainly don't want to. However, I saw many freelancers fade because they had little experience and thought they could easily do something they were clearly not capable of doing. Well. You always learn the most doing a job. It is essential that you manage client expectations. Don't promise anything that you cannot hold timing wise and outcome Ys always aim to over-deliver rather than underperform. Doing a good job is the best way to get more and better clients. Most of your clients will come eventually buy recommendation and no one will recommend someone mediocre. You only have one reputation and you should take good care of it. Therefore, I want to put a warning out there to only take jobs where you can guarantee that the client will be happy in the end with the outcome. Also be flexible just certain degree only though when it comes to adjusting your work and so-called Over service, which is a term used to describe if you put more hours in that you actually bill, well, doing a good job for a client is key, but client management is another one. And I, for example, would always recommend that you don't reply to your clients like late in the evening, for example, after 06:00 PM or on weekends. Because if you start doing that and it becomes a habit, the client will start to expect your immediate reply whenever it suits him. And this is not the freedom you probably assumed you get when you started as a freelancer. So don't reply outside of your business hours unless it's an absolute crazy emergency. Same goes for going above and beyond your tasks, giving advice here and there is totally fine. And obviously it shouldn't be built. But as soon as the client asks you to complete tasks that might take up heaps of your time. I tell them that you would need to build this separately and that you cannot do this for free. You need to find the perfect balance to make your client happy to get more and more jobs and the recommended new clients while also earning a fair wage that represents your skills. Think deep and hard. What's your services actually worth and what the quality of your work is worth. Rather start a little bit low and work your way up there at better than asking for quite a lot and starting high and only delivering little.
4. Accounting 101: Ha accounting who doesn't love figuring out Texas and paying them. Well, I certainly hated. I hated so, so much. And so do most of my fellow freelancers. And especially scary tropic for those that we'll think about starting to freelance. And it is actually a reason why the eventually don't do it at all. Because working in normal job is just so much more convenient when it comes to financials. But don't worry, if you know a few basics, the anxiety will fade eventually. And in the next few minutes we will actually cover those essentials that will get your freelance career going. Anything to add before we get started? Yeah, sure. One thing things might be different in the country where you are living. So Texas differ from country to country. So just be aware that what we discussed today might be a little bit different from where you are living. Anyway, let's get started showin. In most countries you have to Texas which you need to know and unfortunately also pay as a freelancer. These two texts as our quote, VAT and income texts, here's what you need to know about VAT. Vat stands for value added tax. It is basically the text that you have to pay for any goods and services, you purchase a cell. So let's say you go to the supermarket and buy something. The supermarket has to add some VAT, which they will then later pay to the tax authorities. So in Germany, food has a VAT of 7%. So meaning you go to the supermarket and you buy a chocolate for €1, the store gets to keep $0.93 and has to pay $0.07 in texts. That makes up the Euro. And basically the same applies for your services. Now that you are a freelancer, you're selling a service. So you also need to collect and pay VAT. And Germany services are texts with 19%. So for me as an online market here and PR freelancer, I have to charge 19% to my clients and then pass this on to the tax authority. So if I want to touch my client €1000 net, I actually build them 1190 gross. So the client pays me 1190, I pay 190 VAT tax authorities. And then the client actually later on gets to claim those 190 year respect from the State. Sounds confusing. Well, this is how it works. It's pretty straightforward really. When you start freelancing, you usually have to register your business with the authorities. They will then give you a text number and let you know everything you need to know about VAT. Well, to make it a little bit more complicated, usually they are not very helpful. They tell you nothing. You have to find out everything by yourself. Anyway, the first thing you need to figure out is how much VAT You have to charge and pay in your country, there are often some tricky extra roots. So for example, here in Germany we have the so-called Klein until NEMA they glom, which says you don't have to collect and pay VAT if you earn below €17,500 a year. So make sure you figure out the laws and regulations of your country. Asking other freelancers is usually a good start. The next thing you want to do on the invoices you write to your clients. Make sure to include how much VAT you build them. This is super important because they can usually claim that VAT bag from the text authorities, whether you actually have to pay that tax. By the way, to avoid any problems with new clients when you negotiate your rate, make sure both of you are on the same page and talk about either natural or gross rates. If you are talking about net rates while your client things, you are talking about gross rates, either one of you will be very unhappy, okay. Let's say you built the right amount of money and the invoice actually has been paid eight. Now you need to declare the VAT tax authorities and the rhythm and which declared dependence actually once more on your authorities. So here in Germany, the tax authorities usually want to have the DAT report on a monthly or a quarterly basis. And that means you have to fill out a form once a month or once every three months in order to fill it out, you have to keep track on how much VAT actually collected and how much you spent while paying business-related bills because that's fun stuff. You also get BIT bag if you spend it on business for yet it stuff. So let's say last month you build client a €1000 and client BY 1500. So this will result in 475 years VAT that you basically add to your invoices. So, but he also bought some stuff, for example, web hosting for your website for €20 and a fancy office chair for €500. So included in those python and €20 were actually what's actually VAT, which was 83 years and maybe $0.02. Next thing. Now you subtract the VAT already paid from the BAT you collect. So the whole calculation needs to be entered in a form online, for example, in Germany's called etc. where you do it and you list your income and your expenses. And then you submitted to the tax authorities and they will know the amount of VAT you have to pay. And wallah, it really isn't that hot. You shouldn't be scared is really not that difficult. Now that we got VAT covered, let's talk about income texts. No matter if you work as a freelancer or you work a normal job, you have to pay income tax in most countries, if not in every country, to be honest, I don't know. The difference between freelancing and a normal job is that you usually have to pay income tax at the end of the year. Well, in a normal job, the income text is subtracted from your monthly salary. So you don't really have to worry about it at all. If you work in normal job and other thing as a freelancer, you can subtract certain investments into your business from your income and only pay tax on the surplus. Let's say in the last year you made €50 thousand after VAT. But you also bought a new computer and you camera for some some photo kicks the office chair we mentioned earlier, as well as some other best business-related things. So that added up to a total of 10 thousand Euros. That leaves you with a surplus of 40 thousand years, right? That surplus needs to be text. Basically, you have to do a yearly income texts and tell the authorities how much you made, not only with your business, but also with other income streams such as renting out your flat on Airbnb or the stock market. And then you tell the authorities what your total income was and what your total expenses where as a freelancer, as a business. And depending on the amount of your surplus, you then have to pay very little income texts or no income tax if you earned a very little or quite a lot. If you earn a lot. In Germany, the maximum rate is 42%. And I think in some Scandinavian countries, it is actually more than 50% of income text you have to pay on your, your surplus. To stick with our example, if you have a surplus of 40 thousand Euros at the end of the year, you have to pay, at least in Germany, something, maybe around €8,900 and texts. So you have a total net income of 31€1000 for that here. Well, you also have to pay for health insurance so that net income will probably be quite a bit smaller. It sounds far more complicated than it actually is. Like most things about taxes are quite easy to understand. But there are a few small things you need to learn. Some loopholes where you need to figure out. And that's why I would also recommend you to get a text person to help you with your declarations and the first year or two because they can make sure that he owned overpay on Texas while also teaching your thing or two about how the system works. And usually they save you the amount of money that they will then judge you in the end anyway. So it's, it's quite a win situation to learn from someone like that. And I want to stress again that it is super crucial and important to understand income texts. If you don't understand the system and you spend all the money in your bank account and suddenly you have to pay 10 thousand years in income texts which he didn't see coming. This will put you in depth and that's not cool. You don't want that makes sure that things are going smoothly. I urge you to keep an extra list with all your earnings and all your spendings for each year. It's horrible work. I hated a lot. So important. And it will save you so much stress and money in the end. So just do it.
5. Skill-Management: Educate yourself. This is super important stuff being a freelancer. And well, you're basically educating yourself right now. Goods up. As a freelancer, you constantly need to stay up to date. Most importantly, stay up to date on your own line of business. Unfortunately, as freelancer, there's no promotion waiting for you. The only thing that you can basically do is to raise your hourly or daily rate. And the best way of doing this is to be the best or at least to add great value for your clients so that they cannot afford of losing you. To deliver the best work you need to stay ahead of the game. Learn about new trends, learn about new tools, and learn how to do your job faster and better. Also, this will help you deal with any self-doubt that you might experience. Especially in the creative industry, there is a so-called imposter syndrome. It's probably best described as some kind of irrational fear for being found out as a fraud that you don't really know your stuff. I was talking the other day to photographer and he told me every time he sends over the images from the shoot to a new client, he is kind of scared that they will find out that he is not a reef photographer. Even though he was studying photography, he worked as a photographer for the last 20 years. And he is actually really good. However, I could totally relate. I also know that feeling when I'm sending over a draft for a press release to a client, I'm always somewhat scared of that. The client will think that I am that I did a poor job or that I'm not really good PR consultants, even though I worked for more than ten years in PR and I wrote countless press releases and I never really had a problem in that way. Luckily, there are some techniques how to deal with this syndrome. For me, the one thing that works best is education. Education gave me the self-confidence I needed for creative tasks such as photography, writing, graphic design or so, one could argue that the results are always very subjective and that creativity cannot be learned while it disagree, talent definitely plays a role and creative task. But more importantly, you can break down every creative task into hot skills. For example, getting the composition right, nailing color theory, producing a crispy and sharp image or structuring the press released the right way and combining, for example, long and short sentences to give text certain melody that it is pleasing to read. You know those hard skills and you master them and you apply them to your work, you will know that it is actually technically perfect. This will then give you the confidence to stop doubting yourself. Keep on educating yourself. This is your path to success. You're doing great.
6. Financials 101: Money. This is what it comes down to in the end, you watched my video on finding your first client and now you're basically attracting money, like certain presidents are attracting scandals. Soon your pockets will be full and the question arises, what to do with all this cash? I'm not a huge finance expert, but there is one vital tip that I want to give to other freelancers. Build up savings depending where you live and how high the cost of living. You should have at least enough money to survive for three months without any income. Meaning you're able to pay for food, for rent, for insurances, for transportation, et cetera. Even if you don't make any money. Furthermore, you should keep money backed pay income tax depending how much you earn. This can easily be a few 1000 bucks or even a few 10 thousand bucks. So make sure you don't spend any money that will eventually have to go to the state. If you're unable to pay your bills, you will quickly run into trouble and usually paying late means paying more. Unfortunately is not very economical to have 20 thousand Euros or more lying around on your bank account due to the inflation rate, basically, the rate in which money is losing its value. So 2020 in Germany and the US, the inflation rate was approximately 1.4%. Sounds about right. That means if you had €20 thousand on your bank account in the beginning of 20-20, you still had those 20 thousand Euros at the end of the year. But this, this amount of money will have lost almost €300 worth in purchasing power. Now, €300 doesn't sound like much. For example, it's not even 30 years a month. Nevertheless, if you would have invested those €20 thousand, they wouldn't have lost worth, they would have grown and worth before we were talking about self education. And I would highly recommend that you learn some, some basics of investing, because nowadays it is super simple for everyone to open a trading account and start buying shares, ETFs and that kind of stuff. Basically getting started in investing. It might seem like Gamble and nowadays economical situation. But nevertheless, if you act conservatively, it'll be financially worth it. And it is definitely not as complicated as it sounds. And there are some smart options for every one that allows you to start with. First of all, very small and very, very safely. I would recommend that you don't invest all of your savings at once, but you keep some cash on your accounts that you can access easily. Maybe leave enough money for, for two months on your account and everything above that. Some you should probably invest. One thing that seems to work pretty well. And again, I'm not an expert that are ETFs. Etf stands for Exchange Traded Fund. And basically they tried to track a certain index such as, for example, the nasdaq or commodities such as gold. There's also ETFs, the trick how other markets farming, for example, Asian markets. So let's say you think that companies that are focused on sustainability and clean energy, that they will keep on growing. So you can invest in an ETF that represents the value of a certain number of sustainable companies. If you spread your investments on different industries and markets, which is not a super easy to do. It will minimize the risk that you lose money. Of course, there's always the risk that an economical crisis causes the mucus to plummet. However, if you are investing in big indexes and future oriented industries, risks are in my opinion, quite minimal. Again, I'm really not a huge finance expert, but luckily, I don't have to be nowadays anymore, and especially not for what I'm doing. So I'm only investing in companies are truly believe in and an industry I believe in. And that actually has helped me to grow a little bit. The money I earned with freelancing instead of losing it to the inflation. And I really suggest that after learning the nitty-gritty of your country's texts system, that you probably check out some, some classes on investing because it can also help you. And I think every free answer should know some basic rules of investing.
7. It's a Wrap: That's it. I hope you were able to learn one thing or another and shake up some unnecessary fear of working as a freelancer. If you've ever so slightly enjoyed this class, I would be happy if you leave a review and also add me on LinkedIn. You can find the link in the description. If you ever need more advice on freelancing, feel free to reach out or leave it in the comment and wish you all the best.
Julian Wiskemann, Freelance & Sustainable Vending Machines
